Bedford bailout secured as CEO resigns
The state government will give the embattled disability provider a secured loan and purchase its Balyana site in Adelaide’s southeast, with management changes a key condition of its support.
The government will purchase the four-hectare site in Clapham, valued at approximately $12 million, as part of a $15 million support package that prevented Bedford from entering administration yesterday.
This comes after the state government met with Bedford Group on Friday morning and talks continued into the weekend to prevent disruption to Bedford’s vulnerable clients.
Malinauskas told ABC Radio Adelaide this morning that if Bedford had gone into administration on Sunday, it would have been in liquidation by the end of this week, with “no job and no plan” for its 1400 clients.
A condition of the state government stepping in was that Bedford change management, and Bedford CEO Myron Mann resigned over the weekend.
InDaily understands no other leadership changes have happened at this time.
“A change of management was going to be required if the state government was going to step in in the way we have, and that’s now occurred with the CEO’s departure,” Malinauskas said on Monday morning.
“But it’s also, I think it’s self-evident, that there are decisions that Bedford have made in recent years that, with hindsight, were very poor ones.”
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Bedford’s crash followed a five-year turnaround plan that failed to bear fruit, with the organisation racking up more than $20 million in operating losses since 2021.
The loan and proceeds from the sale of Balyana will be used to meet key liabilities, and McGrathNicol has been appointed as restructuring advisors.
Other conditions of the support package include that Bedford cease elements of its current business strategy that led to its financial challenges, along with other recommendations from McGrathNicol.
Bedford said in a statement on Sunday that it will work collectively with McGrathNicol to secure its future.
All Bedford staff and clients were encouraged to return to work as normal on Monday, with operations and programming continuing.
Bruce Carter AO, an insolvency expert who is also on the government’s Whyalla Steel Task Force, has been appointed as the government’s independent observer to the Bedford board.
About 40 people live in supported living facilities at the Balyana site, which the Premier said are no longer fit for purpose, and his government’s intervention “allows for more thoughtful and compassionate planning” for the future of its residents.
The Premier said that though Bedford’s problems are not of the state government’s making, “when people are suffering, we act”.
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Malinauskas said his government have “worked carefully to protect the state’s interests” through the structure of the loan and the land purchase.
“I want to be clear that success is not guaranteed,” Malinauskas said.
“There will be difficult decisions ahead for Bedford, if it is to turn the business around.”
Bedford Group Chairperson Janet Miller said she was “relieved” and had “immense gratitude” for the Premier and his team.
“To our customers, supporters and to other organisations in the sector thank you from the bottom of my heart for the outpouring of support and your desire to stand with us. This speaks volumes about this sector,” Miller said.
“And finally, to our clients, their families, carers, and the staff at Bedford, I cannot truly know the distress that you have suffered over the last 48 hours and I am truly sorry for that.”
Shadow Human Services Minister Michelle Lensink told ABC Radio Adelaide that while the opposition is pleased Bedford has been thrown a lifeline, the Malinauskas government’s response was “very eleventh hour”.
“The government’s known about this since May,” she said on Monday morning.
“I think we need the government to come clean on why the state government hasn’t been able to get the federal government to the table, because these are very complex funding arrangements that they have.”
Bedford is a registered NDIS provider, with its employment services funded and regulated by the federal government’s Department of Social Services.
Lensink said that the NDIS model has failed Bedford and is potentially failing other similar organisations.
Malinauskas said it was “hard to say” if other disability employers are likely to go under, but that there are other supported wage employers around the country feeling the pain of struggling with federal funding models.
